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RE 2012-0925.3RESOLUTION NO. 2012-0925.3 A RESOLUTION OF THE CITY COUNCIL OF COPPELL, TEXAS, AUTHORIZING THE CITY MANAGER TO NEGOTIATE ONE OR MORE TAX ABATEMENT AGREEMENTS PURSUANT TO CHAPTER 312 OF THE TAX CODE AND/OR ECONOMIC DEVELOPMENT AGREEMENTS PURSUANT TO CHAPTER 380 OF THE TEXAS LOCAL GOVERNMENT CODE ON BEHALF OF THE CITY WITH AMAZON.COM.kydc LLC AND/OR ITS RELATED OR AFFILATED COMPANIES ("AMAZON") IN ACCORDANCE WITH THE TERMS SET FORTH HEREIN; AUTHORIZING THE MAYOR TO EXECUTE SUCH AGREEMENTS ON BEHALF OF THE CITY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Amazon has leased or intends to lease approximately 1,077,716 square feet of space in a building to be constricted at 900 W. Bethel Road, Coppell, Texas for a period of at least fifteen (15) years and intends to locate and maintain Tangible Personal Property (as defined by the Texas Tax Code) at such leased premises; and WHEREAS, Amazon has advised the City that a contributing factor that would induce Amazon to lease and occupy the leased premises would be an agreement by the City to provide an economic development grant to Amazon as set forth herein; and WHEREAS, the City has adopted programs for promoting economic development and this Agreement and the economic development incentives set forth herein are given and provided by the City pursuant to and in accordance with those programs; and WHEREAS, the City is authorized by Article 52-a of the Texas Constitution and Chapter 380.001 of the Texas Local Government Code to provide economic development grants to promote local economic development and to stimulate business and commercial activity in the City; and WHEREAS, the City has determined that making an economic development grant to Amazon is in accordance with the City Economic Development Program and will: (i) fiirther the objectives of the City; (2) benefit the City and the City's inhabitants; and (iii) promote local economic development and stimulate business and commercial activity in the City; and WHEREAS, the City has adopted guidelines for tax abatement (the "Tax Abatement Guidelines"); and WHEREAS, the Tax Abatement Guidelines contain appropriate guidelines and criteria governing tax abatement agreements to be entered into by the City as contemplated by the Tax Code; and WHEREAS, the City has adopted a resolution stating that it elects to be eligible to participate in tax abatement; and 1 WHEREAS, in order to maintain and enhance the commercial and industrial economic and employment base of the Coppell area, it is in the best interests of the taxpayers for the City to enter into a tax abatement agreement with Amazon; and WHEREAS, development efforts of Amazon and described herein will create permanent new jobs in the City; and WHEREAS, upon full review and consideration, and all matters related thereto, the City Council is of the opinion and authorizes the City Manager to negotiate one or more tax abatement agreements pursuant to Chapter 312 of the Texas Tax Code and economic development agreements pursuant to Chapter 380 of the Texas Local Government Code on behalf of the City with Amazon; and that the Mayor should be authorized to execute the such agreements on behalf of the City after approval by the City Attorney, Texas; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS, THAT: SECTION 1. The City Council authorizes the City Manager to negotiate one or more tax abatement agreements pursuant to Chapter 312 of the Texas Tax Code and/or economic development agreements pursuant to Chapter 380 of the Texas Local Government Code on behalf of the City with Amazon in accordance with following terms: An abatement of 75% of the city ad valorem taxes assessed the Business Personal Property (including inventory and supplies but excluding "Freeport Goods" and "Goods in Transit' as defined by the Texas Tax Code) to be located at the leased premises for a period of 10 years. A sales tax sharing agreement which provides an annual grant equal to a percentage of the City sales and use tax receipts from the sale of taxable items consummated at the leased premises during a calendar year according to the schedule set forth below for a period of 20 years: Amount of Annual Sales of Taxable Items Consummated at the Leased Premises for the Grant Period $100,000.00 - $10,000,000.00 $10,000,001.00 - $50,000,000.00 $50,000,001.00 - $100,000,000.00 $100,000,001.00 - $200,000,000.00 $200,000,001.00 - $300,000,000.00 $300,000,001.00 or more Percentage for Annual Grant 15% 25% 50% 75% 80% 85% The agreements shall contain appropriate provisions for the timely constriction and development of the project, timely payment of property and sales and use taxes, and for repayment of any grants or incentives in the event of an uncured default of such agreements 2 SECTION 5. The City Manager delivered to the presiding officer of the governing body of each taxing unit in which the property subject to the Agreement is located, a written notice that the City of Coppell, Texas, intends to enter into the Agreement. The notice given by the City Manager included a copy of the Agreement approved by this Resolution. SECTION 6. This Resolution and the Tax Abatement Agreement are hereby approved by the affirmative vote of the majority of the members of the City Council of the City of Coppell, Texas, at a regularly scheduled meeting of the City Council. SECTION 7. This Resolution shall become effective immediately from and after its passage. DULY RESOLVED AND ADOPTED by the City Council of the City of Coppell, Texas, on this the ��I�ay of , 2012. TO CITY ATTORNEY (PGS:0423-12:TM 55056) 2 STATE OF TEXAS § § ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT COUNTY OF DALLAS § This Economic Development Incentive Agreement ("Agreement") is made by and between the City of Coppell, Texas (the "City"), and Glazier Foods Company, a Texas corporation ("Company"), acting by and through their respective authorized officers. WITNESSETH: WHEREAS, the Company has leased or intends to lease approximately 282,000 square feet of office/warehouse/distribution space in the building located at 777 Freeport Parkway, Coppell, Texas (hereinafter described as the "Leased Premises"), for a period of at least ten (10) years (hereinafter defined as the "Lease"), and intends to locate and maintain Tangible Personal Property (hereinafter defined) at the Leased Premises; and WHEREAS, the Company has advised the City that a contributing factor that would induce the Company to continue to occupy the Leased Premises and to retain its existing operations at the Leased Premises would be an agreement by the City to provide an economic development grant to the Company as set forth herein; and WHEREAS, the City has adopted programs for promoting economic development and this Agreement and the economic development incentives set forth herein are given and provided by the City pursuant to and in accordance with those programs; and WHEREAS, the City is authorized by Article 52-a of the Texas Constitution and Chapter 380.001 of the Texas Local Government Code to provide economic development grants to promote local economic development and to stimulate business and commercial activity in the City; and WHEREAS, the City has determined that making an economic development grant to the Company in accordance with this Agreement is in accordance with the City Economic Development Program and will: (i) further the objectives of the City; (2) benefit the City and the City's inhabitants; and (iii) promote local economic development and stimulate business and commercial activity in the City; NOW THEREFORE, in consideration of the foregoing, and on the terms and conditions hereinafter set forth, and other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: Page 1 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) Article I Term This Agreement shall be effective on the last date of execution hereof ("Effective Date") and shall continue until the Expiration Date, unless sooner terminated as provided herein. Article II Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: "Annual Grants" shall mean ten (10) annual grants each in the amount equal to twenty-five percent (25%) of the Sales Tax Receipts for the applicable Grant Period, to be paid to the Company as set forth herein. The amount of each Annual Grant shall be computed by multiplying the Sales Tax Receipts received by the City by the stated percentage for the given Grant Period, less an administrative fee charged to the City by the State of Texas. "Bankruptcy or Insolvency" shall mean the dissolution or termination of a party's existence as a going business, insolvency, appointment of receiver for any part of such party's property and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such party and such proceeding is not dismissed within ninety (90) days after the filing thereof. "City" shall mean the City of Coppell, Texas. "Commencement Date" shall mean the first day of the first calendar month following the date the City issues a certificate of occupancy of the Leased premises for the Company. "Company" shall mean Glazier Foods Company, a Texas corporation. "Consummated" shall have the same meaning assigned by Texas Tax Code, Section 321.203, or its successor. "Expiration Date" shall mean April 1 of the calendar year immediately following the end of the tenth (10th) Grant Period. "Force Majeure" shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, government or de facto governmental action (unless caused by the Page 2I Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) intentionally wrongful acts or omissions of the party), fires, explosions or floods, strikes, slowdowns or work stoppages. "Grant Period" shall mean a full calendar year beginning with January 1 of the calendar year immediately following the Commencement Date. "Impositions" shall mean all taxes, assessments, use and occupancy taxes, charges, excises, license and permit fees, and other charges by public or governmental authority, general and special, ordinary and extraordinary, foreseen and unforeseen, which are or may be assessed, charged, levied, or imposed by any public or governmental authority on the Company or any property or any business owned by Company within the City. "Lease" shall mean the lease of the Leased Premises by Company for a period of not less than ten (10) years commencing on the Lease Inception Date. "Lease Inception Date" shall mean the Commencement Date of the lease term under the Lease, but no later than January 1, 2013. "Leased Premises" shall mean approximately 282,000 square feet of office/warehouse/distribution space in the building located at 777 Freeport Parkway, Coppell, Texas. "Payment Request" shall mean a written request from Company to the City for payment of the applicable Annual Grant accompanied by the Sales Tax Certificate for the applicable Grant Period. "Related Agreement" shall mean any other agreement by and between the City and the Company, or any of its affiliated or related entities, relating to the Leased Premises. "Required Use" shall mean the Company's continuous lease and occupancy of the Leased Premises, and Company's continuous operation of business engaged in the distribution and shipping of food supplies and related merchandise to the public. "Retailers" shall mean the Company and tenants within the Leased Premises required by the State of Texas to collect Sales and Use Tax. "Sales and Use Tax" shall mean the one percent (1%) sales and use tax imposed by the City pursuant to Chapter 321, Texas Tax Code on the sale of Taxable Items by the Retailers Consummated in the City at the Leased Premises. "Sales Tax Certificate" shall mean a report provided by the State of Texas to the City in accordance with Texas Tax Code, Section 321.3022 (or other applicable provision of the Texas Tax Code), which lists the amount of Sales and Use Tax paid (including any Page 3 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) refunds, credits or adjustments) received by the City from the State of Texas from the sale of Taxable Items by the Retailers Consummated at the Leased Premises for the applicable Grant Period, or if such report is not available, a certificate or other statement, containing the information required as set forth herein, in a form provided by the Company reasonably acceptable to the City setting forth the collection of Sales and Use Tax (including any refunds, credits or adjustments) by the Company received by the City from the State of Texas, for the sale of Taxable Items by the Retailers Consummated at the Leased Premises for the applicable Grant Period, which are to be used to determine eligibility of the Company for the Annual Grants, together with such supporting documentation required herein, and as the City may reasonably request. "Sales Tax Receipts" shall mean the City's receipts from the State of Texas from the Retailers' collection of the Sales and Use Tax (it being expressly understood that the City's one percent (1%) sales and use tax receipts are being used only as a measurement for its participation through the use of general funds), as a result of sale of Taxable Items by Retailers for the applicable Grant Period consummated at the Leased Premises. Sales Tax Receipts do not include any sales and use tax imposed by City for the benefit of the Coppell Recreation Development Corporation, pursuant to the Development Corporation Act, Chapters 501-505 of the Texas Local Government Code, or sales and use tax imposed by the City for crime control or street maintenance. "State of Texas" shall mean the Office of the Texas Comptroller, or its successor. "Tangible Personal Property" shall mean tangible personal property, equipment and fixtures (but excluding inventory, supplies, Freeport Goods and Goods in Transit) owned or leased by Company that is added to the Leased Premises subsequent to the execution of this Agreement. "Taxable Items" shall mean both "taxable items" and "taxable services" as those terms are defined by Chapter 151, Texas Tax Code, as amended. Article III Economic Development Grant 3.1 Annual Grants. (a) Subject to the Required Use and continued satisfaction of all the terms and conditions of this Agreement and the obligation of the Company to repay the Annual Grants pursuant to Article V hereof, the City agrees to provide the Company with ten (10) Annual Grants, each in an amount equal to twenty-five percent (25%) of the Sales Tax Receipts for the applicable Grant Period. The Annual Grants shall be paid within ninety (90) days after receipt of a Payment Request following the end of the applicable Grant Period. Each Payment Request shall be submitted to the City not later than sixty (60) days immediately following the end of the applicable Grant Period. If the Company fails to timely submit the Payment Request for any applicable Grant Period the Company shall forfeit the Annual Grant for such Grant Period. For illustration purposes only, assume the Commencement Date is September 15, 2012, in which case the first Grant Period Page 4 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) would begin January 1, 2013, through and including December 31, 2013, the Payment Request for the first Grant Period would be submitted to the City by the Company within sixty (60) days after December 31, 2013, and the first Annual Grant would be paid within ninety (90) days after end of the first Grant Period provided the Company has provided the Payment Request. The amount of the first Annual Grant shall be equal to twenty-five percent (25%) of the Sales Tax Receipts for the period beginning January 1, 2013, through and including December 31, 2013. (b) Adjustment Notification. The Company shall promptly notify the City in writing of any adjustments found, determined or made by the Retailers, the State of Texas or by an audit that results, or will result, in either a refund or reallocation of Sales Tax Receipts or the payment of Sales and Use Tax or involving amounts reported by the Company as subject to this Agreement. Such notification shall also include the amount of any such adjustment in Sales and Use Tax or Sales Tax Receipts. The Company shall notify the City in writing within ninety (90) days after receipt of notice of the intent of the State of Texas, to audit the Company, its Affiliates and/or its customers. Such notification shall also include the period of such audit or investigation. (c) Adjustments. In the event the Retailers files an amended sales and use tax return, or report with the State of Texas, or if additional Sales and Use Tax is due and owing by the Company to the State of Texas, as determined or approved by the State of Texas, affecting Sales Tax Receipts for a previous Grant Period, then the Annual Grant payment for the Grant Period immediately following such State of Texas approved amendment shall be adjusted accordingly (i.e., up or down, depending on the facts) provided the City has received Sales Tax Receipts attributed to such adjustment. As a condition precedent to payment of such adjustment, the Company shall provide the City with a copy of any such amended sales and use tax report or return, and the approval thereof by the State of Texas. Copies of any amended sales and use tax return or report or notification from the State of Texas that additional Sales and Use Tax is due and owing by the Retailers to the State of Texas, as determined by the State of Texas, affecting Sales Tax Receipts for a previous Grant Period shall be provided to the City with the Payment Request for the next Grant Period. (d) Refunds and Underpayments of Grants. In the event the State of Texas determines that the City erroneously received Sales Tax Receipts, or that the amount of Sales and Use Tax paid to the Company exceeds (or is less than) the correct amount of Sales and Use Tax for a previous Grant Period, for which the Company has received an Annual Grant, the Company shall, within sixty (60) days after receipt of notification thereof from the City specifying the amount by which such Annual Grant exceeded the amount to which the Company was entitled pursuant to such State of Texas determination, adjust (up or down, depending on the facts) the amount claimed due for the Annual Grant payment for the Grant Period immediately following such State of Texas determination. If the Company does not adjust the amount claimed due for the Annual Grant payment for the Grant Period immediately following such State of Texas determination the City may, at its option, adjust the Annual Grant payment for the Grant Period immediately following such State of Texas determination. If the adjustment results in funds to be paid back to the City, the Company shall repay such amount to the City within sixty (60) days after receipt of such State of Page 5 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) Texas determination. As a condition precedent to payment of such refund, the City shall provide Company with a copy of such determination by the State of Texas. The provisions of this Section shall survive termination of this Agreement. (e) Grant Payment Termination; Suspension. This payment of Annual Grants shall terminate on the effective date of determination by the State of Texas or other appropriate agency or court of competent jurisdiction that the Leased Premises are not a place of business resulting in Sales and Use Taxes being due the City from the sale of Taxable Items by the Retailers at the Leased Premises. In the event the State of Texas seeks to invalidate the Leased Premises as a place of business where Sales and Use Tax was properly remitted to the State of Texas (the "Comptroller Challenge") the payment of Annual Grants by the City hereunder shall be suspended until such Comptroller Challenge is resolved in whole favorably to the City. In such event, the Company shall not be required to return or refund Annual Grants previously received from the City provided the Company is actively defending against and/or contesting the Comptroller Challenge and Company promptly informs the City in writing of Company's actions and with copies of all documents and information related thereto. In the event the Comptroller Challenge is not resolved favorably to the City and/or in the event the State of Texas determines that the Leased Premises are not a place of business where the Sales and Use Tax was properly remitted to the State of Texas, and Sales and Use Tax Receipts previously paid or remitted to the City relating to the Leased Premises are reversed and required to be repaid to the State of Texas, then the obligation to pay the Annual Grants shall terminate and the Company shall refund all Annual Grants received by the Company from the City that relate to the Comptroller Challenge, which refund shall be paid to the City within forty-five (45) days of the date that the Comptroller Challenge required the City to repay Sales and Use Tax Receipts. 3.2 Current Revenue. The Annual Grants made hereunder shall be paid solely from lawfully available funds that have been appropriated by the City. Under no circumstances shall City's obligations hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision. The Annual Grant shall be paid solely from annual appropriations from the general funds of the City or from such other funds of the City as may be legally set aside for such purpose consistent with Article III, Section 52(a) of the Texas Constitution. Further, City shall not be obligated to pay any commercial bank, lender or similar institution for any loan or credit agreement made by Company. None of the City's obligations under this Agreement shall be pledged or otherwise encumbered in favor of any commercial lender and/or similar financial institution. 3.3 Grant Limitations. Under no circumstances shall the obligations of the City hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision; provided; however, City agrees during the term of this Agreement to make a good faith effort to appropriate funds each year to pay the Grants for the then ensuing fiscal year. Further, the City shall not be obligated to pay any commercial bank, lender or similar institution for any loan or credit agreement made by the Company. None of the obligations of the City under this Agreement shall be pledged or otherwise encumbered by the Company in favor of any commercial lender and/or similar financial institution. Page 6 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) 3.4. Indemnification. THE COMPANY AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, THEIR RESPECTIVE OFFICERS, AGENTS AND EMPLOYEES (COLLECTIVELY THE "CITY") HARMLESS FROM AND AGAINST ANY AND ALL REASONABLE LIABILITIES, DAMAGES, CLAIMS, LAWSUITS, JUDGMENTS, ATTORNEY FEES, COSTS, EXPENSES, AND ANY CAUSE OF ACTION THAT DIRECTLY RELATES TO ANY OF THE FOLLOWING: ANY CLAIMS OR DEMANDS BY THE STATE OF TEXAS THAT THE CITY HAS BEEN ERRONEOUSLY OR OVER -PAID SALES AND USE TAX FOR ANY PERIOD DURING THE TERM OF THIS AGREEMENT AS THE RESULT OF THE FAILURE OF THE COMPANY TO MAINTAIN A PLACE OF BUSINESS AT THE PROPERTY OR IN THE CITY, OR AS A RESULT OF ANY ACT OR OMISSION OR BREACH OR NON-PERFORMANCE BY COMPANY UNDER THIS AGREEMENT EXCEPT THAT THE INDEMNITY PROVIDED HEREIN SHALL NOT APPLY TO ANY LIABILITY RESULTING FROM THE ACTIONS OR OMISSIONS OF THE CITY. THE PROVISIONS OF THIS SECTION ARE SOLELY FOR THE BENEFIT OF THE PARTIES HERETO AND NOT INTENDED TO CREATE OR GRANT ANY RIGHTS, CONTRACTUAL OR OTHERWISE, TO ANY OTHER PERSON OR ENTITY. IT BEING THE INTENTION OF THE PARTIES THAT THE COMPANY SHALL BE RESPONSIBLE FOR THE REPAYMENT OF ANY ANNUAL GRANTS PAID TO THE COMPANY HEREIN THAT INCLUDES SALES AND USE TAX RECEIPTS THAT THE STATE OF TEXAS HAS DETERMINED WAS ERRONEOUSLY PAID, DISTRIBUTED, OR ALLOCATED TO THE CITY. Article IV Conditions to Annual Grants The obligation of the City to pay the Annual Grants shall be conditioned upon the compliance and satisfaction by the Company of the terms and conditions of this Agreement and each of the conditions set forth in Article IV. 4.1 Payment Request. The Company shall, as a condition precedent to the payment of each Annual Grant, provide the City with the applicable Payment Request. 4.2 Good Standing. The Company shall not have an uncured breach or default of this Agreement, or a Related Agreement. 4.3 Sales Tax Certificate. As a condition to the payment of each Annual Grant hereunder, City shall have received a Sales Tax Certificate for the applicable Grant Period for which payment of an Annual Grant is requested. Beginning April 1 of the calendar year immediately following the first Grant Period and continuing on April 1 of each calendar year thereafter that this Agreement is in effect, the Company shall provide the City with a Sales Tax Certificate for the applicable Grant Period. The City shall have no duty to calculate the Sales Tax Receipts or determine the entitlement of the Company to any Annual Grant, or pay any Annual Grant during the term of this Agreement until such time as Company has provided the Page 7 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) City a Sales Tax Certificate for the applicable Grant Period. The City may but is not required to provide Company with a form for the Sales Tax Certificate required herein. At the request of the City, the Company shall provide such additional documentation as may be reasonably requested by City to evidence, support and establish the Sales and Use Tax paid and collected (including sales and use tax paid directly to the State of Texas pursuant to a direct payment permit) by Company for the sale of Taxable Items by Retailers Consummated at the Leased Premises and received by City from the State of Texas. The Sales Tax Certificate shall at a minimum contain, include or be accompanied by the following: a. A schedule detailing the amount of the Sales and Use Tax collected and paid to the State of Texas as a result of the sale of Taxable Items by Retailers Consummated at the Leased Premises for the previous ending Grant Period; b. A copy of all sales and use tax returns and reports, sales and use tax prepayment returns, direct payment permits and reports, including amended sales and use tax returns or reports, filed by Company for the previous ending Grant Period showing the Sales and Use Tax collected (including sales and use tax paid directly to the State of Texas pursuant to a direct payment certificate) by Company for the sale of Taxable Items Consummated at the Leased Premises; c. A copy of all direct payment and self-assessment returns, including amended returns, filed by Company for the previous ending Grant Period showing the Sales and Use Tax paid for the sale of Taxable Items by Retailers Consummated at the Leased Premises; d. Information concerning any refund or credit received by Company of the Sales or Use Taxes paid or collected by Company (including any sales and use tax paid directly to the State of Texas pursuant to a direct payment permit) which has previously been reported by Company as Sales and Use Tax paid or collected; and e. A schedule detailing the total sales of Taxable Items by Retailers Consummated at the Leased Premises for the previous ending Grant Period. City agrees to the extent allowed by law to maintain the confidentiality of the Sales Tax Certificate. 4.4 Minimum Sales Tax Receipts. As a condition precedent to the payment of each Annual Grant hereunder, City shall have received Sales Tax Receipts of at least Forty Thousand Dollars ($40,000.00) for the applicable Grant Period. The required Minimum Sales Tax Receipts are not achieved for a given Grant Period the Company shall forfeit the Annual Grant for such Grant Period but such failure shall not be an event of default subject to termination and recapture as provided in Article V hereof. Page 8 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) 4.5 Required Use. During the period beginning on the Effective Date and continuing until the Expiration Date, the Leased Premises shall not be used for any purpose other than the Required Use, and the operation of the Leased Premises in conformance with the Required Use shall not cease for more than thirty (30) continuous days except in connection with, and to the extent of an event of Force Majeure. 4.6 Continuous Lease and Occupancy. The Company shall, beginning on the Effective Date and continuing thereafter until the Expiration Date, continuously lease and occupy the Leased Premises. 4.7 Lease. The Company shall have entered into the Lease on or before January 1, 2013, and the Company shall occupy the Leased Premises on or before May 1, 2013, but no later than the Lease Inception Date. Article V Termination; Repayment 5.1 Termination. This Agreement shall terminate upon any one of the following: (a) by written agreement of the parties; (b) Expiration Date; (c) by either party in the event the other party breaches any of the terms or conditions of this Agreement, or a Related Agreement, and such breach is not cured within thirty (30) days after written notice thereof; (d) by City, if Company suffers an Event of Bankruptcy or Insolvency; (e) by City, if any Impositions owed to the City or the State of Texas by Company shall become delinquent (provided, however the Company retains the right to timely and properly protest and contest any such Impositions); or (f) by either party, if any subsequent Federal or State legislation or any decision of a court of competent jurisdiction declares or renders this Agreement invalid, illegal or unenforceable. 5.2 Repayment. In the event the Agreement is terminated by City at any time during the Grant Periods pursuant to Section 5.1(c) (following an uncured breach by Company), (d), (e), or (f) (provided such legislation or decision requires the repayment of the Annual Grants), the Company shall immediately repay to the City an amount equal to the Annual Grants previously paid by the City to the Company as of the date of such termination, plus interest at the rate periodically announced by the Wall Street Journal as the prime or base commercial lending rate, or if the Wall Street Journal shall ever cease to exist or cease to announce a prime or base lending rate, then at the annual rate of interest from time to time announced by Citibank, N.A. (or by any other New York money center bank selected by the City) as its prime or base commercial lending rate, which shall accrue from the date of the first payment of the Annual Grants during such period until paid. Page 9 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) 5.3 Right of Offset. The City may, at its option, offset any amounts due and payable under this Agreement against any debt (including taxes) lawfully due to the City from the Company, regardless of whether the amount due arises pursuant to the terms of this Agreement or otherwise and regardless of whether or not the debt due the City has been reduced to judgment by a court. Article VI Miscellaneous 6.1 Binding Agreement. The terms and conditions of this Agreement are binding upon the successors and assigns of the parties hereto. This Agreement may not be assigned without the express written consent of the City Manager. 6.2 Limitation on Liability. It is understood and agreed between the parties that the Company, in satisfying the conditions of this Agreement, has acted independently, and the City assumes no responsibilities or liabilities to third parties in connection with these actions. The Company agrees to indemnify and hold harmless the City from all such claims, suits, and causes of actions, liabilities and expenses of any nature whatsoever by a third party arising out of the Company's failure to perform its obligations under this Agreement. 6.3 No Joint Venture. It is acknowledged and agreed by the parties that the terms hereof are not intended to and shall not be deemed to create a partnership or joint venture among the parties. 6.4 Authorization. Each party represents that it has full capacity and authority to grant all rights and assume all obligations that are granted and assumed under this Agreement. 6.5 Notice. Any notice required or permitted to be delivered hereunder shall be deemed received three (3) days thereafter sent by United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the party at the address set forth below or on the day actually received if sent by courier or otherwise hand delivered. If intended for City, to: With a copy to: Attn: City Manager Peter G. Smith City of Coppell, Texas Nichols, Jackson, Dillard, 255 Parkway Boulevard Hager & Smith, L.L.P. P.O. Box 9478 1800 Lincoln Plaza Coppell, Texas 75019 500 North Akard Dallas, Texas 75201 Page 10 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) If intended for Company: Attn: John H. Miller Glazier Foods Company 11303 Antoine Houston, Texas 77066 6.6 Entire Agreement. This Agreement is the entire Agreement between the parties with respect to the subject matter covered in this Agreement. There is no other collateral oral or written Agreement between the parties that in any manner relates to the subject matter of this Agreement, except as provided in any Exhibits attached hereto. 6.7 Governing Law. The Agreement shall be governed by the laws of the State of Texas without regard to any conflict of law rules. Exclusive venue for any action concerning this Agreement shall be in the State District Court of Dallas County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. 6.8 Amendment. This Agreement may only be amended by the mutual written agreement of the parties. 6.9 Legal Construction. In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions, and it is the intention of the parties to this Agreement that in lieu of each provision that is found to be illegal, invalid, or unenforceable, a provision shall be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 6.10 Recitals. The recitals to this Agreement are incorporated herein. 6.11 Counterparts. This Agreement may be executed in counterparts. Each of the counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. 6.12 Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the termination of this Agreement shall survive termination. 6.13 Successors and Assigns. This Agreement may not be assigned without the prior written consent of the City Manager. 6.14 Employment of Undocumented Workers. During the term of this Agreement the Company agrees not to knowingly employ any undocumented workers and if convicted of a violation under 8 U.S.C. Section 1324a (0, the Company shall repay the amount of the Annual Grants and any other funds received by the Company from the City as of the date of such violation Page 11 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) within 120 business days after the date the Company is notified by the City of such violation, plus interest at the rate of 6% compounded annually from the date of violation until paid. The Company is not liable for a violation of this section in relation to any workers employed by a subsidiary, affiliate, or franchisee of the Company or by a person with whom the Company contracts. (Signature Page to Follow) Page 12 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) EXECUTED on this oys day of — , 2012. CIi In Attest: By: Christel Pettinos, City Secretary Approved Peter G. Smith, City EXECUTED this the day of 2012. GLAZIER FOODS COMPANY By: ` John H. Miller, President Page 13 Economic Development Incentive Agreement City of Coppell and Glazier Foods Company (TM 55479) STATE OF TEXAS § COUNTY OF DALLAS § TAX ABATEMENT AGREEMENT This Tax Abatement Agreement (the "Agreement") is entered into by and among the City of Coppell, Texas (the "City"), and Glazier Foods Company, a Texas corporation (the "Lessee")(the City and Lessee collectively referred to as the "Parties" or singularly as a "Party"), acting by and through their authorized representatives. WITNESSETH: WHEREAS, the City Council of the City of Coppell, Texas (the "City Council"), passed an Ordinance (the "Ordinance") establishing Tax Abatement Reinvestment Zone No. 73 (the "Zone'), for commercial/industrial tax abatement, as authorized by the Property Redevelopment and Tax Abatement Act, Chapter 312 of the Texas Tax Code, as amended (the "Tax Code"); and WHEREAS, the City has adopted guidelines for tax abatement (the "Tax Abatement Guidelines"); and WHEREAS, the Tax Abatement Guidelines contain appropriate guidelines and criteria governing tax abatement agreements to be entered into by the City as contemplated by the Tax Code; and WHEREAS, the City has adopted a resolution stating that it elects to be eligible to participate in tax abatement; and WHEREAS, in order to maintain and enhance the commercial and industrial economic and employment base of the Coppell area, it is in the best interests of the taxpayers for the City to enter into this Agreement in accordance with said Ordinance, the Tax Abatement Guidelines and the Tax Code; and WHEREAS, Lessee has leased or intends to lease approximately 282,000 square feet of off_ze/warehouse/distribution space in the building on the Land (hereinafter defined) located at 777 Freeport Parkway, Coppell, Texas (hereinafter described as the "Leased Premises"), for a period of at least five (5) years (hereinafter defined as the "Lease"), and intends to locate and maintain Tangible Personal Property (hereinafter defined) at the Leased Premises; and WHEREAS, the Parties believe that the development efforts of the Lessee described herein will create permanent new jobs in the City; and WHEREAS, the City Council finds that the contemplated use of the Improvements (hereinafter defined), and the other terms hereof are consistent with encouraging development of the Zone in accordance with the purposes for its creation and/or in compliance with the Tax Abatement Guidelines, the Ordinance adopted by the City, the Tax Code and all other applicable laws; and Page 1 Tag Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) WHEREAS, the City Council finds that the Leased Premises sought are feasible and practicable and would be of benefit to the Premises to be included in the Zone and to the City after expiration of this Agreement; and WHEREAS, a copy of this Agreement has been furnished, in the manner prescribed by the Tax Code, to the presiding officers of the governing bodies of each of the taxing units in which the Premises is located; and WHEREAS, the City desires to enter into an agreement with the Lessee for the abatement of taxes pursuant to Chapter 312 of the Tax Code, as amended; NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and other valuable consideration, the adequacy and receipt of which is hereby acknowledged, including the anticipated expansion of primary employment, the attraction of major investment in the Zone, which contributes to the economic development of the City and the enhancement of the tax base in the City, the Parties agree as follows: Article I Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: "Bankruptcy or Insolvency" shall mean the dissolution or termination of a party's existence as a going business, insolvency, appointment of receiver for any part of a party's property and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such party, and such proceeding is not dismissed within ninety (90) days after the filing thereof. "City" shall mean the City of Coppell, Texas. "Effective Date" shall mean the last date of execution of this Agreement, unless the context indicates otherwise. "First Year of Abatement" shall mean January 1 of the calendar year immediately following the date a certificate of occupancy is issued for the occupancy of the Leased Premises by the Lessee. "Force Majeure" shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, adverse weather, government or de facto governmental action (unless caused by acts or omissions of such party), fires, explosions or floods, strikes, slowdowns or work stoppages. Page 2 Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) "Freeport Goods" shall have the same meaning as assigned by Section 11.251 of the Tax Code and Article VIII, Section 1-j of the Texas Constitution and located on the Property. Freeport Goods does not include "Goods in Transit' as defined by Tax Code, Section 11.253. "Goods in Transit" shall have the same meaning assigned by Tax Code, Section 11.253. "Improvements" shall mean the building on the Land located at 777 Freeport Parkway, Coppell, Texas. "Land" shall mean the real property described in Exhibit "A". "Lease" shall mean the lease of the Leased Premises by Lessee for a period of not less than five (5) years commencing on the Lease Inception Date. "Lease Inception Date" shall mean the date the term of the Lease commences, but not later than January 1, 2013. "Leased Premises" shall mean approximately 282,000 square feet of office/warehouse/distribution space in the Improvements. "Lessee" shall mean Glazier Foods Company, a Texas corporation. "Premises" shall mean collectively, the Land and Improvements following construction thereof, but excluding the Tangible Personal Property. "Related Agreement" shall mean any other agreement by and between the City and the Lessee, or any of its affiliated or related entities, relating to the Land and the Improvements. "Tangible Personal Property" shall mean tangible personal property, equipment and fixtures (but excluding inventory, supplies, Freeport Goods and Goods in Transit) owned or leased by Lessee that is added to the Leased Premises subsequent to the execution of this Agreement. "Taxable Value" shall mean the appraised value as certified by the Appraisal District as of January 1 of a given year. Article II General Provisions 2.1 The Lessee has entered into, or intends to enter into, the Lease. The Lessee intends to locate and maintain Tangible Personal Property at the Leased Premises. 2.2 The Premises are not in an improvement project financed by tax increment bonds. Page 3I Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) 2.3 This Agreement is entered into subject to the rights of the holders of outstanding bonds of the City. 2.4 The Premises and Tangible Personal Property is not owned or leased by any member of the Coppell City Council or any member of the Coppell Planning and Zoning Commission, or any member of the governing body of any taxing units joining in or adopting this Agreement. 2.5 Lessee shall, before May 1, of each calendar year that the Agreement is in effect, certify in writing to the City that it is in compliance with each term of the Agreement. 2.6 The Leased Premises constructed thereon at all times shall be used in the manner (i) that is consistent with the City's Comprehensive Zoning Ordinance, as amended, and (ii) that, during the period taxes are abated hereunder, is consistent with the general purposes of encouraging development or redevelopment within the Zone. Article III Tax Abatement Authorized 3.1 This Agreement is authorized by the Tax Code and in accordance with the City Tax Abatement Guidelines, and approved by resolution of the City Council. 3.2 Subject to the terms and conditions of this Agreement, and provided the Taxable Value of the Tangible Personal Property is at least One Million Five Hundred Thousand Dollars ($1,500,000.00) as of the First Year of Abatement and as of January 1 of each calendar year thereafter during the term of this Agreement, the City hereby grants Lessee an abatement of seventy-five percent (75%) of the Taxable Value of the Tangible Personal Property for a period of five (5) consecutive years beginning with the First Year of Tax Abatement. The actual percentage of Taxable Value of the Tangible Personal Property subject to abatement for each year this Agreement is in effect will apply only to the Tangible Personal Property that is added to the Leased Premises. 3.3 The period of tax abatement herein authorized shall be for a period of five (5) consecutive years. 3.4 During the period of tax abatement herein authorized, Lessee shall be subject to all taxation not abated, including but not limited to, sales tax and ad valorem taxation on land. 3.5 The Lessee agrees to locate and maintain Tangible Personal Property at the Leased Premises with a Taxable Value of at least One Million Five Hundred Thousand Dollars ($1,500,000.00) as of the First Year of Abatement and as of January 1 of each calendar year thereafter during the term of this Agreement. 3.6 The term of this Agreement shall begin on the Effective Date and shall continue until March 1 of the calendar year following the sixth (6`h) anniversary date of the First Year of Abatement, unless sooner terminated as provided herein. Page 4I Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) Article IV Improvements 4.1 Nothing in this Agreement obligates the Lessee to enter into the Lease and/or occupy the Leased Premises, but said action is a condition precedent to tax abatement pursuant to this Agreement. 4.2 As a condition precedent to the initiation of the Lessee's tax abatement pursuant to this Agreement, Lessee shall have entered into the Lease on or before January 1, 2013. Lessee agrees and covenants to continuously lease and occupy the Leased Premises for a period of at least five (5) years commencing on the Lease Inception Date. 4.3 Lessee agrees to maintain the Leased Premises during the term of this Agreement in accordance with all applicable state and local laws, codes, and regulations. 4.4 The City, its agents and employees shall have the right of access to the Leased Premises during Lessee's occupancy of the Leased Premises to inspect the Leased Premises at reasonable times during business hours and with reasonable prior notice to Lessee, and in accordance with Lessee's visitor access and security policies, in order to insure that the use of the Leased Premises are in accordance with this Agreement and all applicable state and local laws and regulations (or valid waiver thereof). Article V Default: Recapture of Tax Revenue 5.1 In the event Lessee: (i) fails to occupy the Leased Premises in accordance with this Agreement or in accordance with applicable State or local laws, codes or regulations; a ( has delinquent ad valorem or sales taxes owed to the City (provided Lessee retains it right t timely and properly protest such taxes or assessment); (iii) suffers an event of "Bankruptcy or Insolvency"; or (iv) breaches any of the terms and conditions of this Agreement, or a Related Agreement, then Lessee after the expiration of the notice and cure periods described below, shall be in default of this Agreement. As liquidated damages in the event of such uncured default, the Lessee shall, within thirty (30) days after termination, pay to the City all taxes which otherwise would have been paid by the Lessee to the City without benefit of a tax abatement for the Tangible Personal Property, with interest at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code, as amended, but without penalty. The Parties acknowledge that actual damages in the event of default termination would be speculative and difficult to determine. The Parties further agree that any abated tax, including interest as a result of this Agreement, shall be recoverable against the Lessee, its successors and assigns and shall constitute a tax lien against the Tangible Personal Property, and shall become due, owing and shall be paid to the City within thirty (30) days after termination. Page 5I Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) 5.2 Upon breach by Lessee of any obligations under this Agreement, the City shall notify the Lessee in writing, who shall have thirty (30) days from receipt of the notice in which to cure any such default. If the default cannot reasonably be cured within such thirty (30) day period, and the Lessee has diligently pursued such remedies as shall be reasonably necessary to cure such default, then the City may extend the period in which the default must be cured. 5.3 If the Lessee fails to cure the default within the time provided as specified above, as such time period may be extended, then the City at its sole option shall have the right to terminate this Agreement, by written notice to the Lessee. 5.4 Upon termination of this Agreement by City, all tax abated as a result of this Agreement, shall become a debt to the City as liquidated damages, as set forth in Section 5.1 above, and shall become due and payable not later than thirty (30) days after a notice of termination is provided. The City shall have all remedies for the collection of the abated tax provided generally in the Tax Code for the collection of delinquent property tax. The City at its sole discretion has the option to provide a repayment schedule. The computation of the abated tax for the purposes of the Agreement shall be based upon the full Taxable Value of the Tangible Personal Property, without tax abatement for the years in which tax abatement hereunder was received by the Lessee, as determined by the Appraisal District, multiplied by the tax rate of the years in question, as calculated by the City Tax Assessor -Collector. The liquidated damages shall incur penalties as provided for delinquent taxes and shall commence to accrue after expiration of the thirty (30) day payment period. Article VI Annual Application for Tax Exemption It shall be the responsibility of the Lessee pursuant to the Tax Code, to file an annual exemption application form with the Chief Appraiser of the Appraisal District in which the eligible taxable property has situs. A copy of the exemption application shall be submitted to the City upon request. Article VII Annual Rendition The Lessee shall annually render the value of the Tangible Personal Property to the Appraisal District, and shall provide a copy of the same to the City upon written request. Article VIII Miscellaneous 8.1 Notice. Any notice required or permitted to be delivered hereunder shall be deemed received three (3) days thereafter sent by United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the Party at the address set forth below or on the day actually received if sent by courier or otherwise hand delivered: Page 6I Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) If intended for City, to: Attn: City Manager City of Coppell, Texas 255 Parkway Boulevard P.O. Box 9478 Coppell, Texas 75019 If intended for Lessee, to: Attn: John H. Miller Glazier Foods Company 11303 Antoine Houston, Texas 77066 With a copy to: Peter G. Smith Nichols, Jackson, Dillard, Hager & Smith, L.L.P. 1800 Lincoln Plaza 500 N. Akard Dallas, Texas 75201 8.2 Authorization. This Agreement was authorized by resolution of the City Council approved by its Council meeting authorizing the Mayor to execute this Agreement on behalf of the City. 8.3 Severability. In the event any section, subsection, paragraph, sentence, phrase or word herein is held invalid, illegal or unconstitutional, the balance of this Agreement shall stand, shall be enforceable and shall be read as if the Parties intended at all times to delete said invalid section, subsection, paragraph, sentence, phrase or word. 8.4 Governing Law. This Agreement shall be governed by the laws of the State of Texas without regard to any conflict of law rules. Exclusive venue for any action under this Agreement shall be the State District Court of Dallas County, Texas. The Parties agree to submit to the personal and subject matter jurisdiction of said court. 8.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and constitute one and the same instrument. 8.6 Entire Agreement. This Agreement embodies the complete agreement of the Parties hereto, superseding all oral or written previous and contemporary agreements between the Parties and relating to the matters in this Agreement, and except as otherwise provided herein cannot be modified without written agreement of the Parties to be attached to and made a part of this Agreement. 8.7 Recitals. The determinations recited and declared in the preambles to this Agreement are hereby incorporated herein as part of this Agreement. 8.8 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. Page 7I Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) 8.9 Assignment. This Agreement shall be binding on and inure to the benefit of the parties to it and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns. This Agreement may not be assigned by the Lessee without the prior written consent of the City Manager. 8.10 Employment of Undocumented Workers. During the term of this Agreement, the Lessee agrees not to knowingly employ any undocumented workers and, if convicted of a violation under 8 U.S.C. Section 1324a (f), the Lessee shall repay the taxes abated herein as of the date of such violation within 120 days after the date the Lessee is notified by the City of such violation, plus interest at the rate of 6% compounded annually from the date of violation until paid. 8.11 Right of Offset. The City may at its option, offset any amounts due and payable under this Agreement against any debt (including taxes) lawfully due to the City from the Lessee, regardless of whether the amount due arises pursuant to the terms of this Agreement or otherwise and regardless of whether or not the debt due the City has been reduced to judgment by a court. (Signature page to follow) Page 8I Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) EXECUTED in duplicate originals thg4 y of 2012. Agreed LIN City Attorney CIn 0 Attest: By:el Pe ' Christttinos, ity Secretary EXECUTED in duplicate originals the day of 2012. GLAZIER FOODS COMPANY By: John H. Miller, President Page 9I Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473) Exhibit "A" (Legal Description of Land) Lots 1 & 2, Block 1 of the Minyard Addition (79.528 acres). Page 10I Tax Abatement Agreement City of Coppell and Glazier Foods Company (TM 55473)